Question : 61.It difficult to compare investment centers using return investment when : 1302898

 

 

61.It is difficult to compare investment centers using return on investment when there is a significant difference in the _________ between the investment centers.

A.age of the assets

B.net operating profit after taxes

C.amount of noninterest-bearing current liabilities

D.market share

 

62.The 2014income statement for the East Division of Procter Wells Company is as follows:

 

Sales              $1,800,000

Operating expenses              1,380,000

Net operating income              420,000

Interest expense              120,000

Earnings before taxes              300,000

Income tax expense (40%)              120,000

Net income              $   180,000

 

This division’s invested capital is $4,000,000.How much is theEast Division’s return on investment?

A.6.3%

B.5.7%

C.10.5%

D.7.5%

 

63.The income statement for the Commercial ConstructionDivision of the KenyonCompany is as follows:

 

Sales              $272,000

Operating expenses              132,000

Net operating income              140,000

Interest expense              20,000

Earnings before taxes              120,000

Income tax expense (30%)              36,000

Net income              $84,000

 

If this division’s invested capital is $500,000, how much is its return on investment?

A.19.6%

B.16.8%

C.20.8%

D.14.0%

 

64.South Division of Renato Enterprises reported net income of $480,000 in March on sales of $7,900,000. If this division hasno interest expense, an income tax rate of 30 percent, and reported a return on investment of 12 percent, how much is invested capital?

A.$948,000

B.$4,000,000

C.$2,800,000

D.More information is needed to determine the answer.

65.West Division of PoolGuard has invested capital of $900,000. This division incurred $80,000 in interest expense and $20,000 in income tax expense related to interest in July.If this division reported a return on investment of 15 percent, how much isNOPAT?

A.$60,000

B.$75,000

C.$135,000

D.$195,000

 

66.Rail Star Company reported the following results for 2014:

 

Sales$6,000,000

Investment turnover2.4

Return on investment10%

 

Given this information, how much is the company’s invested capital?

A.$2,500,000

B.$1,440,000

C.$600,000

D.$1,440,000

 

67.The FloridaDivision of Garner Furniture reported the following results for 2014:

 

Invested capital$800,000

Profit margin5%

Return on investment8%

 

Given this information, how much was sales?

A.$1,280,000

B.$500,000

C.$1,600,000

D.$64,000

 

68.The 2014 income statement for the Clothing Division of Tom Ron Surf Company is as follows:

 

Sales              $445,000

Operating expenses              270,000

Net operating income              175,000

Interest expense              35,000

Earnings before taxes              140,000

Income tax expense (30%)              42,000

Net income              $98,000

 

How much is net operating profit after taxes?

A.$108,500

B.$133,000

C.$73,500

D.$122,500

 

69.The JerseyDivision of Yankee Products has invested capital of $1,400,000.This division incurred $80,000 in interest expense and $140,000 in income tax expense in 2014.If this division reported a return on investment of 14 percent, how much is net operating profit after taxes?

A.$416,000

B.$196,000

C.$116,000

D.$276,000

 

70.Western Electric reported the following results for 2014:

 

Sales$8,400,000

Investment turnover2.5

Return on investment12%

 

Given this information, how much is the company’s NOPAT?

A.$1,008,000

B.$2,520,000

C.$403,200

D.$3,360,000